Kevyn Orr floats plan to end health care for early police, fire retirees

8:47 PM, July 11, 2013

Detroit Emergency Financial Manager Kevyn Orr reads one page of the 128-page City of Detroit proposal to creditors while answering questions from the Detroit Free Press editorial board at the newspaper in Detroit on Friday, June 14, 2013. / Eric Seals/Detroit Free Press

Representatives of city unions and pensioners met Thursday with members of emergency manager Kevyn Orr’s restructuring team to begin talks on drastic changes to health care for current and retired workers. One proposal floated was the elimination of health care coverage for some firefighters and police officers who retire early.

“It comes down to dollars,” George Orzech, chairman of the Detroit Police and Fire Pension System, said after coming out of meetings at city hall.

Meanwhile, Orr issued his 12th executive order late Thursday, approving the city’s 2013-14 budget that cut funding for Mayor Dave Bing’s office by 33%. Bing had opposed the cut, but the City Council overrode him. The $1.1-billion budget didn’t do much for deficit reduction and largely left the city’s current level of services intact.

The order also approves the city’s white book that outlines compensation for city workers. The council declined to approve the white book earlier this month because several members were opposed to the $225,000 annual salary offered to new Police Chief James Craig.

As for Thursday’s meeting, Orzech said there were few new details beyond what’s already been discussed: moving retirees onto Medicare and current workers onto health exchanges being set up by the government under the Affordable Care Act, with some subsidy to help workers pay monthly premiums for health plans in the private-sector market.

The health care discussions appeared to have been much more subdued and less contentious than talks Wednesday about cutting pension benefits for current workers and retirees. That matter appears headed for an epic battle as workers and pensioners file suit against Gov. Rick Snyder and state Treasurer Andy Dillon, seeking to prevent them from filing a possible municipal bankruptcy petition for Detroit because, they argue, such a move would violate Michigan’s constitutional protections of public pension benefits.

Unlike pensions, health care benefits have no such constitutional defenses, giving unions and others far less power to fight proposals to reduce benefits. And Orr’s team thinks that if the city goes into bankruptcy, even the state’s pension protections are likely to be trumped by federal bankruptcy law.

By Orr’s calculation, Detroit’s debts and its pension and health obligations to workers and retirees may be as high as $20 billion, with $5.7 billion going to health care. It’s money Orr and his restructuring team say the city cannot pay.

Steve Dolunt, a police commander who is president of the Detroit Police Command Officers Association, said after the meeting that he learned the city is proposing to eliminate health care for police and firefighter retirees who leave before they are 55. Coverage would start once the retiree turns 55. That would be a change from the current system that gives cops, for one, retiree health care when they retire after 20 years on the job, or 25 years for those in mid-level management positions.

Dolunt said an officer or firefighter who started at age 21 and retired after 20-25 years would have to find another way to get health care until he or she reached age 55 — meaning, lining up another job.

“I’m 57 and in decent shape — there’s people who aren’t in really good shape, and who’s going to hire them?” Dolunt said. “Who’s going to hire a firefighter, who’s done 20 years, in a new fire department? He can’t pass a physical. Same with police officers in their 50s.

“It’s scary,” he said.

Dolunt said the discussions, beyond that, haven’t gone into details about what sorts of plans would be offered, how much they would cost workers or what monthly contributions the city would continue to make.

“We haven’t set a date for another meeting yet,” Dolunt said. “We’re not trying to be greedy. We didn’t come onto the job to get rich or be heroes. We came on to do a job. You’ve got firefighters who risk their lives, EMS and the police — and they’re doing this, and their families are wondering, ‘Are you going to come home at night?’ … And you get to the end of your career and you think, ‘I made it.’ And now you go, ‘No, I didn’t.’ ”